This is a blog about the future of digital media law from Laurence Kaye. Laurence runs Laurence Kaye Consulting Limited (click here), bringing insight an clarity to the complexities of the digital world.

February 28, 2013

I wanted to let you know - in case you hadn't heard - that the Laurence Kaye team - Mailin Bala, Sherif Malak and I - is in the middle of its own shift. As from April 2, we're joining forces with national law firm Shoosmiths to create a specialist publishing/digital media team, backed up by the firm's broad commercial offering.

So it's very much 'business as usual' for us and the clients we're bringing, but with the benefit of having lots of clever - and good value! - lawyers to deal with all the legal issues outside our core areas on which our clients need legal advice, including areas such as corporate and business sales, financing, employment, competition and dispute resolution.

There's a press release about our move here. If you want to know anything more, please drop me an email at laurie@laurencekaye.com or send me a message via Linked-In.

But have no fear, my blog posts will continue without change, though apologies if they're slightly more sporadic than as usual during this period of change.

My next post, on the overriding themes of the 'digital shift', should be whizzing its way to you in the next few days.

London Book Fair

Also, if you're planning to come to the London Book Fair, I'm running a seminar as part of the LBF's 'Love Learning' programe at 10 am on April 16th (Cromwell Room, EC1) on "21st Century Publishing - IP centric, multi-platform", details here. I'll be presenting along with Eric Huang, New Business/IP Acquisitions Director for the Penguin Children’s Group, and Neil Blair of The Blair Partnership and Pottermore, and well known as J K Rowling's Agent. I hope you can join us. We'll be taking a close look at the new '360 degree' approach needed in publishing today. For those non-regular LBF attendees, you need to register with LBF. You can do so here.

January 15, 2013

It looks like 2013 is off to a good start for the creative industries in a year in which demand for high quality creative output continues to grow.

The Government has published its proposed legislation for new corporation tax reliefs for British high-end television production (namely dramas and documentaries), animations and video games.

I asked my colleague Mailin Bala to look at the draft legislation to see what it delivers and what impact it has on co-productions.

OK, so, what does it amount to?

In short, qualifying companies will be able to claim an additional deduction of 100% of UK qualifying production expenditure in computing their taxable profits. Where that deduction then results in a loss, companies will be able to surrender those losses for a payable tax credit amounting to 25% of qualifying production expenditure.

To qualify for the new relief, the following criteria have to be met:

there must be a high end TV programme (meaning the average cost of expenditure per slothour must be at least £1m), animation or video game being produced which is intended for broadcast/commercial release;

the content must be certified by the Secretary of State as being British; and at least 25% of the core production expenditure incurred by the company must relate to expenditure on goods or services used or consumed in the UK.

See here for HRMC's detailed description of each of the reliefs (including the conditions to be applied) and the proposed draft legislation. See also this document for theGovernment’s response to the consultation on the reliefs.

What constitutes ‘British’?

That will be determined by scoring a minimum 16 points out of a possible 31. Points will be awarded for using British locations, language, use of UK key staff and promoting British culture. In some cases, it will be sufficient for the content to include EU elements, rather than purely British ones.

When do the reliefs come into play?

All being well, the new reliefs will apply to qualifying expenditure incurred from 1st April 2013. Thisis subject to the government obtaining State aid approval of the ‘British’ test from the European Commission.

Who can claim the relief?

UK companies that are responsible for production activities and for undertaking negotiations and contracting for rights, goods and services in respect of the content.

What about co-productions?

Only one TV production company/games developer can claim the relief per relevant content. Ifthere is more than one company that meets the qualifying criteria, then it is the company that is most directly engaged in the activities that can claim the relief. However, a company can elect not to be regarded as a television production company/games developer by recording its election in the company's return for an accounting period.

The election will apply to all content that commence principal photography/ or begins production in that, or any subsequent, accounting period, until the election is withdrawn.

There is however, an additional benefit for TV production, in that a co-producer can claim therelief if:

the programme is made under a relevant international co-production treaty (though notthrough a partnership); and

the co-producer makes an effective creative, technical and artistic contribution to the programme.

In an attempt to avoid over complication and abuse of the relief, the Government has purposely not legislated for other forms of co-production to be eligible for the relief.

This may in itself appear to stymie co-productions, such as cross-industry productions where for example rights holders engage production houses to conduct all or some of their production activity.

Yet, rather helpfully, the government has acknowledged that companies wishing to access therelief that are undertaking genuine co-productions, may wish to structure their business in such a way in order to access the relief.

Whilst setting clearer boundaries would have been preferable, this appears to be an invitation for other genuine co-productions to set up special purpose vehicles to avail themselves of therelief; potentially benefitting additional sectors in the creative industries.

May 04, 2010

If you will indulge us veering slightly away from the usual digital media and IP topics, we would like to turn to matters contractual by drawing your attention to a very important recent case - BSkyB v EDS [2010] EWHC 86 (TCC). You can find the full 468 page Judgment here. Or, if you don't have a spare week to plough through it, we've picked out the key points in our legal update below.

The significance of this case extends to all industries so the publishers and media companies amongst you should take note of the below as much as the IT suppliers and outsourcers - and everyone in between.

The key point to draw from this case is a reminder that anything said by a party before entering into a contract might expose that party to a claim for misrepresentation, depending on the nature of the statement made, the other party’s reliance on it, and the provisions of the contract itself.

**Legal Update**

The recent case of BSkyB v EDS has emphasised that suppliers need to be extremely careful about what they say in the course of pre-contractual negotiations. This is because they might find that they make statements which amount to negligent – or even fraudulent – misrepresentations. This is the position EDS (a supplier of IT services) found itself in, having made pre-contractual promises to BSkyB (its customer) and then failing to deliver against those promises.

Fraudulent misrepresentations

Suppliers need to be aware that liability in respect of fraudulent misrepresentations cannot be limited by reference to any contractual term. This case demonstrates the way in which an employee who makes unsubstantiated statements during a pre-contractual pitch or tender can potentially incur huge penalties on behalf of his company. The interim award to BSkyB in this case was £200 million. This is despite the fact that the contract between EDS and BSkyB contained a cap on liability of £30 million. Such caps on liability cannot be made to apply to fraudulent misrepresentations.

Negligent misrepresentations

However, liability in respect of negligent misrepresentations can be limited by contract with careful drafting.

It is important for suppliers to include a properly drafted ‘entire agreement’ clause in order to exclude any liability for negligent statements made in pre-contractual negotiations (although as noted above, no such clause can exclude liability for fraudulent misrepresentations). It is also important for suppliers to include a cap on liability (supported by adequate insurance) and carefully thought out exclusions and limitations of liability provisions in order to exclude or limit liability for negligent misrepresentations.

Customers, on the other hand, should ensure that key representations and promises made by suppliers pre-contract are included in the contract. In this way, customers can avoid the argument as to whether or not they relied on pre-contractual representations – instead, they will be able to sue for breach of contract in the event the supplier fails to deliver against those promises.

Summary

Where your company is acting as a supplier (whether of goods or services), the main point is to have the right procedures in place to ensure no pre-contractual promises are made which you cannot deliver against. In addition, well-drafted contractual provisions can offer protection.

Where your company is acting as a customer (particularly in the purchase of IT services), it should identify those key pre-contractual promises on which it will rely (e.g. timescales, milestones, technical specifications) and include them as terms of the contract. It should consider the potential losses it may suffer as a result of the supplier failing to deliver as promised and whether or not it is prepared to allow the supplier to limit or exclude liability for such losses.

October 10, 2007

I went to a Ministerial IP Roundtable the other day - as one does - about technology and new business models in the creative industries. I was armed with lots of legal 'stuff 'about IP. Actually, it was a really good meeting. And the main point that was made by a lot of industry players was about the need for 'traditional' business skills - in finance, marketing and management - to help more start up and SME businesses in the creative industries to develop into major businesses.

WIPO - the World Intellectual Property Organisation - have a really interesting conference coming up in Geneva on October 29 and 30 on IP and the Creative Industries which looks as though it will explore some of these themes. Perhaps not quite the skiing season, but interesting nonetheless. The UK's creative industries are one of our real economic powerhouses and deserve all the business and institutional support they can get.

September 03, 2007

In usual lawyer fashion, I've thought about the pros and cons of blogging - 'to blog or not to blog'. So, enough analysis, here goes.

I thought I'd start with a short piece about brand names. I took a call from a client on Friday. He'd been told about a site using a very similar brand name to theirs. I asked the usual questions about trade mark registrations etc. Choosing the right brand name - one that's right for the product or service and that's legally protectable - is vital in the online as well as the offline world. Here's a really useful piece with tips on what to think about when choosing a brand name